Standard Chartered announces $1 billion buyback and dividend hike, shares jump 8%

Standard Chartered (LSE: STAN) shares surged 8.2% in morning trade, erasing some recent losses, after reporting a strong 19% increase in 2023 pretax profits. The positive news was sweetened by a share buyback program and a dividend increase.

Operating income climbed 10% to $18.02 billion, fueled by a 17% jump in non-interest income. Net interest margin also improved, exceeding analyst expectations.

“We’ll build on this success, targeting a 12% return on equity by 2026,” declared CEO Bill Winters.

The momentum carried into Q4, with operating income rising 16% and pretax profit more than doubling year-over-year. StanChart proposed a final dividend of $0.21 per share, bringing the full-year payout to $0.27 – a 50% increase from a year prior.

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Further boosting investor confidence, the bank announced a $1 billion share buyback program. Chair Jose Vinals acknowledged recent share price underperformance but expressed confidence, stating, “Our solid performance gives us a good base to deliver sustained value.”

Looking ahead, StanChart guided operating income to grow 5%-7% in 2024-2026 and committed to returning at least $5 billion to shareholders over the next three years.

With ambitious targets and shareholder-friendly initiatives, StanChart appears poised for a brighter future, as reflected in today’s share price jump.